Buy now, probe later? Buyers from Russia snap up Antalya property, raising prices and eyebrows

After attacks, 3 of the original 8 matryoshka statues remain in the Matruşkalı Park (Photos: Diego Cupolo)

Antalya realtors have rarely been so busy. That’s according to Birol Yazar, who translates Russian and Ukrainian legal documents for his father’s namesake real estate agency, Kemal Yazar Gayrimenkul, in Konyaaltı – a popular district among foreign residents.

“After the war started, my work spiked,” Birol said, lifting a thick, blue binder and flipping through the papers inside. “Look at this. These are all foreigners. I will translate all of this.”

Before Russia's invasion of Ukraine in February, Birol said he’d get one or two translation jobs a day. Since March, he’s been getting 10-15 jobs a day.

“More Ukrainians came than Russians at first, but then many more Russians came because of the sanctions,” Birol said. “They didn’t trust the banks, they didn’t feel safe there … the way they saw it, it was best to come to Turkey and open bank accounts here.”

Other Antalya realtors interviewed by Turkey recap shared similar observations. Through much of 2022, citizens of Russia have been leading a record surge in home purchases by foreigners in Türkiye, accounting for 26 percent of nationwide home sales to foreigners in July, according to figures released today by the Turkish Statistical Institute, which also ranked Antalya as the top choice among foreign home buyers last month.

Apart from attracting partial blame for a sharp hike in real estate prices, rising property purchases in the country by citizens of Russia may also attract scrutiny as an avenue to circumvent war-related sanctions.

Western officials have expressed concerns about the potential for investor-friendly real estate markets like Türkiye and the United Arab Emirates, along with New York and London, to serve as conduits for illicit activities, warning secondary sanctions could be applied to individuals or entities enabling sanctions evaders, including through the sale of large properties.

Matryoshka park

The Liman neighborhood of Antalya’s Konyaaltı district, referred to as “Little Russia” by some locals, has long been known for its sizable Russian population, pebble stone beach and more recently for acts of vandalism on matryoshka statues in its main plaza this spring, apparently in response to the Russia's invasion of Ukraine.

A few blocks west of the Matruşkalı Park, as it’s called, stand the Kremlin Residence apartment buildings and Russian-language ads hang in the windows of surrounding real estate agencies, of which there are many, including the one where Birol and his father, Kemal, reflected on the surge of apartment shoppers from Russia.

“After the Boğa Çayı bridge, it’s mostly Russians,” Birol said. “There are nearly no Turks left here.”

“Patır patır, [rapidly] they are buying land all around,” Kemal responded, adding interest for property from citizens of Russia had expanded outside the traditionally sought out areas in urban centers and by the sea.

“One Russian came in and showed me he had bought a farmland in Korkuteli that day. Sixty-thousand square meters,” Kemal continued. “I asked him if he had been there. He said, ‘No, I thought this might be handy in the future, so I just bought it.’”

Along with all-cash land sales, local realtors also noted a rise in batch apartment purchases. In March, an Antalya realtor quoted by the business newspaper, Dünya, said some clients from Russia were purchasing up to 20-30 properties at the same time.

A local real estate agent told Turkey recap, such purchases are usually to secure citizenship of Türkiye through property, which now requires 400,000 dollars of investments after the threshold was raised, up from 250,000 dollars, in April. The same real estate agent estimated about 10 percent of their clients from Russia in Antalya this year were specifically buying real estate to acquire citizenship.

The price is rife

That rising demand, combined with a depreciating Turkish lira, high inflation and broader global dynamics, has seen real estate prices grow dramatically for both renters and buyers throughout the country. Local realtors said it was not uncommon to see landlords raise rents fivefold on residential and commercial tenants in Antalya this year.

According to media reports, some landlords raised prices so much on incoming tenants from Russia and Ukraine, that some tenants left Türkiye without paying their rents.

Still, the rent hikes have prompted officials to act. President Recep Tayyip Erdoğan earlier this month announced a housing allocation program to address rising prices. Separately, residence quotas went into effect July 1, with aims to ban new foreign renters from 1,200 neighborhoods across Türkiye.

The latter was the result of growing anti-migration sentiments in public discourse, rising in parallel with citizens’ economic worries, and most often directed towards Syrian and Afghan refugees. Though in Antalya, the quotas also impact people from Russia and a smaller number of people from Ukraine, with restrictions placed on 10 local neighborhoods, including Liman.

Realtors told Turkey recap the quotas immediately froze rent prices within restricted neighborhoods, but raised rents in adjacent areas, though most said it was too soon to gauge the rule’s true impacts and noted it did not prevent foreigners from buying homes in restricted areas.

“The problem in this area [Konyaaltı] is there are no new houses, there are no new buildings, and people like this area since it’s near the sea, it’s a development area, it’s a good area,” said Sergiy Volchenkov, managing director at Tolerance Homes, a national real estate agency headquartered in Antalya, which focuses on property sales to foreign buyers.

“Because of this, the prices will not reduce much,” he continued, saying property sales at his company grew three-to-five times since February.

In addition to foreigner clients, local buyers from surrounding provinces, like Isparta, Burdur and Afyonkarahisar, have been driving up home sales and prices over the last two years by seeking high-value rental properties in Antalya, according to Kemal Akgül, director of the Antalya Emlak Pazarı real estate agency. Akgül also held the view current prices would not retreat.

“If lira exchange rates stabilize, and then if contractors believe they can now purchase construction materials and start new projects, then the prices could stabilize, but not go down,” Akgül said.

Sanctions or sanctuary

In contrast to the realtors above, İsmail Çağlar, president of the Antalya Realtors Chamber, said Antalya’s real estate bubble had already popped and prices would soon go back to “normal.” He also expressed general support for foreign interest in real estate in Türkiye and saw it as a boost to the nation’s economy.

Asked if large property sales might attract negative attention from Western nations, Çağlar abruptly changed tone, responding: “We love all human beings because god created them. We have no problems.”

To clarify, Turkey recap asked, “What if Western nations find problems with large money transfers to Türkiye from sanctioned individuals?”

Çağlar answered, “All types of investments are welcome. Our door is open. We’re a Muslim country, we do not discriminate against anyone based on race or religion or anything. We accept everyone.”

The statements echoed those made by FM Mevlüt Çavuşoğlu in March. When asked at the Doha Forum if Russia's oligarchs were welcome in Türkiye, Çavuşoğlu said, “If Russian oligarchs ... or any Russian citizens want to visit Türkiye, of course they can.”

He added, “If you mean whether these oligarchs can do any business in Türkiye, then of course if it is legal and not against international law, I will consider it.”

The line between legal and illegal will remain a focus point for international monitors who fear that distinction could blur after Russia's President Vladimir Putin and Erdoğan vowed to increase economic cooperation at their August 5 meeting in Sochi.

The results of those agreements remain to be seen, though on his flight back, Erdoğan told journalists five banks in Türkiye had adopted Russia’s Mir payments system, which allows citizens of Russia in Türkiye to use their cards for payments at a time when Visa and Mastercard suspended services in Russia.

The move might help tourists, but Western officials have said the Mir system is not a top concern for sanctions evasion since it mostly serves small purchases by average citizens while many elites in Russia have already moved their funds outside the country's financial system.

Throughout interviews with Antalya realtors, Turkey recap noted several recurring themes: 1. People from Russia used to shop mainly for summer homes, but are now increasingly buying homes to stay year-round. 2. Few in the sector expect residence quotas to achieve anything. 3. More high-income earning people from Russia are shopping for homes in Antalya than in previous years.

“Our customers used to be mostly middle-class or upper-middle class in Russia, but now customers from higher up are coming, too,” one realtor said, referring to Russia's wealthy.

Asked if those “higher up” clients are coming to Antalya, as well, the realtor said, “Yes, because they cannot go to Europe nowadays.” (DC/NÖ/VK)

This report was produced by Turkey recap with support from the Heinrich Böll Foundation in Turkey and the IPS Communication Foundation.

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